• 5 minutes Covid-19 logarithmic growth
  • 8 minutes Why Trump Is Right to Re-Open the Economy
  • 12 minutes Charts of COVID-19 Fatality Rate by Age and Sex
  • 14 minutes China Takes Axe To Alternative Energy Funding, Slashing Subsidies For Solar And Wind
  • 3 hours Its going to be an oil bloodbath
  • 42 mins Trump will meet with executives in the energy industry to discuss the impact of COVID-19
  • 2 hours What If ‘We’d Adopted A More Conventional Response To This Epidemic?’
  • 1 hour Marine based energy generation
  • 2 hours Cpt Lauren Dowsett
  • 2 hours The Most Annoying Person You Have Encountered During Lockdown
  • 4 hours Which producers will shut in first?
  • 17 mins US Shale Resilience: Oil Industry Experts Say Shale Will Rise Again
  • 13 hours CDC covid19 coverup?
  • 3 hours Real Death Toll In CCP Virus May Be 12X Official Toll
  • 3 hours Washington doctor removed from his post, over covid
  • 13 hours How to Create a Pandemic
  • 13 hours Iran-Turkey gas pipeline goes kaboom. Bad people blamed.

Breaking News:

IEA: OPEC Can’t Save The Oil Market

Oil Giants Turn On Each Other As Crude Prices Plummet

Oil Giants Turn On Each Other As Crude Prices Plummet

Various larger and smaller oil…

Is Gazprom’s LNG Megaproject Doomed To Fail?

Is Gazprom’s LNG Megaproject Doomed To Fail?

Russia gas giant Gazprom has…

BHP Billiton Sells U.S. Oil Assets To BP

Oil jack

BHP Billiton has concluded the sale of its U.S. shale oil operations to BP and Merit Energy, a local U.S. oil independent, for US$10.8 billion, ABC reports, quoting BHP’s chief executive Andrew Mackenzie as saying the sale aimed to maximize value and boost returns to shareholders.

In fact, the sale was prompted by activist investor Elliott Management, which has been nagging BHP to exit U.S. shale for over a year now. BHP bought the shale assets as part of its takeover of Petrohawk Energy and, separately, from Chesapeake Energy back in 2011, paying north of US$20 billion for them.

The selling price is obviously substantially lower than this, but the time to offload the assets, according to analysts was right, with shale oil production on the rise prompted by higher international prices. The time to buy them, one analyst noted to Reuters, was wrong, on the other hand, with the shale patch booming and asset prices through the roof.

Besides the high price for the assets, BHP has been booking substantial writedowns on these assets over the last few years, thanks to the 2014 sector downturn. This eventually led to Elliott Management losing its patience and insisting that BHP ends its U.S. shale venture. Before the end, however, BHP will this year book another US$2.8 billion (A$3.8 billion) in after-tax impairment on the carrying value of the operations.

Related: Saudi Budget Deficit Shrinks As Oil Prices Rally

BP will buy BHP’s assets in the Eagle Ford, Permian, and Haynesville in two transactions for a combined US$10.5 billion. The rest of the assets, in Fayetteville, will go to Merit Energy.

For BP, the deals are a great opportunity to expand its footprint in the shale patch, even “transformational” as CEO Bob Dudley called the acquisition, which, Reuters notes, is its first after the 1999 acquisition of Atlantic Richfield Co. The BHP assets will boost BP’s U.S. onshore oil and gas resources by as much as 57 percent.

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:



Join the discussion | Back to homepage




Leave a comment

Leave a comment

Oilprice - The No. 1 Source for Oil & Energy News